The next step

Reforming the business energy efficiency tax landscape

[Document]

To the EA's CRC registry

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Scrapping the carbon commitment

CRC to go

The once-heralded energy efficiency regulation, the Carbon Reduction Commitment (CRC), faces the chop as the government continues to look for ways to streamline energy-related legislation. The Treasury has just released a consultation paper called Reforming the business energy efficiency tax landscape , which asks companies what they think might be a better way of trying to control pollution through a combination of tax and regulation (see The next step ).

Covered

If you are affected by the CRC scheme, you will already have registered with the Environment Agency’s CRC Registry (see The next step ). It’s a carbon tax mechanism that demands you measure and report your annual electricity and gas-related carbon emissions, following a specific set of measurement rules as laid out by the scheme.

What do we know for sure?

This government is in the mood to reduce regulation and the burden on small and medium-sized businesses. In the consultation it proposes drastic reforms to the carbon reporting and taxation regime for UK businesses, and explains how it intends to end the overlapping requirements of various schemes currently imposed on the private sector. Note. This could spell the end for the CRC. It could also lead to the creation of an enhanced Energy Savings Opportunity Scheme (ESOS) and the introduction of new incentives to encourage you to more easily invest in energy efficiency measures.

Good news?

On the whole this consultation is good news. Currently, some businesses have to comply with two energy tax schemes (the CRC and Climate Change Levy (CCL)) as well as three carbon reporting requirements, via the CRC, ESOS and mandatory carbon reporting.

It seems as though the government is keen to get rid of the CRC altogether and focus all business energy taxation through the CCL instead. It then wants to create a single reporting framework which “incorporates the most effective elements from the range of reporting schemes and delivers a significant net reduction in compliance costs associated with reporting schemes” .

The more stringent and comprehensive the carbon regulation required of larger businesses, the bigger the risk of the demand for disclosure of environmental and carbon data trickling down to smaller companies. So this simplification is good news for large and small businesses alike.

No change yet

Nothing is likely to change until at least 2017, meaning that the reporting requirements for the CRC in 2015 remain the same.

Tip. If you’re affected by the Scheme, continue your carbon reporting in the same way and be sure to hit your deadlines.

For a copy of Reforming the business energy efficiency tax landscape and a link to the EA’s CRC Registry, visit http://tipsandadvice-environment.co.uk/download (EN 10.06.07).